Hi, The theory behind the two-step method is to get your GP checkbook register to agree with your bank statement. A company may collect payments during the day and then package them all together and make a single deposit to the bank. Imagine your deposit includes 20 different checks from 20 different customers. If you used the Bank Transaction method, you will have 20 different entries in your check register. If you do not in fact deposit each check separately to the bank, your check register will show 20 deposits and your bank statement will only show one. If the bundles do not match, reconciliation is very difficult. You mentioned 'adjustments during the bank reconciliation process' these are different from regular bank transactions. These adjustment transactions are meant to handle any service charges or interest income etc that is discovered on the bank statement that hadn't been considered prior to the reconciliation. You could just as easily create bank transaction entries for these items, it's just easier sometimes if you do it as part of the reconciliation routine. You do not lose the ability to void a transaction. You can void bank transactions as well as deposits. One general rule I always like to teach is that EVERYTHING you do in the Bank Transaction or Bank Transfer windows writes to the general ledger. Conversely, NOTHING you do in the Bank Deposit entry window will write to the general ledger. Kind regards, Leslie
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